Ohio Beef Letter

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Issue # 525

February 21, 2007

Forage Focus: PASTURE RENOVATION - What's the Plan? - Rory Lewandowski, Extension Educator, Athens County

Up until a few weeks ago every conversation I had with a cattle producer included some comments about mud and cattle tearing up pasture paddocks. Since then we've had a spell of below freezing temperatures and cattle are on a little more solid footing. This won't last though and sooner or later mud and pasture damage will be back in the conversation. Looking back over the past several years it seems like it is becoming more common to deal with rain and soggy ground than snow and frozen pastures in the winter. If this is the trend, what kind of plan should cattle producers have to protect and renovate their pasture paddocks from the trampling that is going to occur? After giving this some thought and talking to a couple of people and then thinking back on some pasture situations I have seen here in Athens County, I'm going to put forth a couple of plans and situations in an attempt to answer this question.

PLAN 1: Avoid tearing up pastures. This plan basically calls for the installation of a heavy use feeding pad and staying on it during wet, soggy periods. This plan will protect pastures, but there are a number of disadvantages. Maybe the number one disadvantage is the expense. This is not a cheap option, especially if sized correctly and built correctly. There may be cost-share money available to help with the expense, but the livestock owner's share is still likely to be significant. Another disadvantage is manure disposal. The livestock owner must have a way to clean the pad after the winter season and get the manure/hay spread somewhere.

PLAN 2: Let nature take its course. In my mind I'm thinking about calling this the Steve Hibinger approach. Steve is known by a number of Athens County graziers and is a recently retired NRCS grazing specialist. Steve raises cattle on his farm in Noble County and has seen all kinds of pasture situations and conditions in his work helping livestock owners set up grazing systems. I called Steve up on a cold morning at the end of January and asked him what he advised regarding pasture renovation after cattle had trampled up a paddock under muddy conditions. If you know Steve, then you know that I didn't get a short 3 or 4 sentence answer. I got a story full of life experiences with some good lessons that are worth repeating.

Steve said that his answer to this type of question use to be a heavy use feeding pad that allowed producers to avoid this type of damage to pastures. Steve had one of those and liked it until a flood came and washed most of his away. While deciding what to do about repairing/replacing the pad, he began to winter his cows on some bottom ground and this has worked out so well for him in the last 5 to 6 years that he does not intend to go back to the heavy use pad. His wintering system is based on holding 40 cows on 15 acres of bottomland pasture/hay ground. This is not stockpiled forage. Hay is fed in bale rings, concentrating on about 1/4 of the field area each year. What this means is that while cows have access to the entire 15 acres, hay is fed only in about one quarter of this area each year. Within this area, bale rings are moved each time hay is fed so that hay is never fed in the same spot twice. The field gets trampled up and area of the field devoted to the hay rings really gets tore up. Steve said the first year he did this his intention was to go into the field in early spring, smooth out the area and re-seed. That never happened because the wet spring didn't allow it to get done.

Even though the re-seeding idea didn't work out, there was lots of regrowth once the cows left the field in about mid-May. Yes, there were lots of weeds, like ragweed, pigweed, and thistles. Steve let the field go until about July that first year and then went out and mowed off the growth that was there. It was slow going because the ground was so rough. He found that underneath the weeds, grass and clover was growing and the hay made from that field actually turned out to be better than he expected. By September the field was back to mainly grass and clover and he turned the cows in for about a month of grazing. After his hill pastures were grazed in the fall the cows went back into that same bottom field for wintering.

Currently, Steve's system of wintering his 40 beef cows on that 15 acre bottom is to feed hay in rings utilizing about one quarter of the field area and moving the bale ring to a different spot within that targeted feeding area each time a new bale is needed. The same quarter portion of the field is used as a feeding area for 2 winter periods in a row. Steve feels this gives a good build up of hay mulch and manure and improves the field's fertility. As cows begin calving in the spring, they are removed to permanent hill pastures once the calves are about 3 to 4 days old. Steve ends up with about half a dozen cows left in the bottom field in May and by mid-May everything is out. Steve lets the field recover on its own without any smoothing or re-seeding. When growth is 10 to 12 inches tall he will either do a grazing pass or mow the growth. He says at this stage it looks poor, very weedy, but underneath grass and clover are showing up. Typically by July he turns his cows into this bottom field and gets 4 to 5 weeks of grazing by which time the clover growth is very thick. In fact, the clover growth is so thick that bloat is a concern. He gets another grazing pass in September, and then the field is not used until the over wintering period.

Steve says that he has not smoothed out the field or put any seed into this bottom for the past 5 to 6 years he has over wintered on it. He has noticed several things. First, rough areas tend to smooth out with normal grazing over a 1 to 2 year period. Second, in April the field looks as though it has been destroyed and grazing is over for the year. However, after the cows leave in early to mid-May, the field always recovers. Yes, it looks bad, with lots of weed growth, but Steve reminds graziers that weeds grazed young are a good forage. Underneath the weed growth, grass, mainly bluegrass, but some orchardgrass and timothy along with red and white clover is beginning to grow. Third, either a quick grazing pass or mowing can control this weed growth. This lets the grass and clover come through. Fourth, by mid-July the field is back to predominantly clover and grass and ready for grazing. Steve says he knows that this seems to violate the grazing principle to protect and build up your sod base, but he has found that given this management and rest period, the field recovers and is producing more tonnage than when it was a hay field. Steve thinks the key is letting the cows have access to the entire 15 acres while concentrating hay feeding in just a portion of the field. The key within the feeding area is to keep moving the bale rings. When I questioned Steve a little further he did say that in areas where the cattle really tromped up the sod, those areas that basically turned into a muddy slurry or soup, did take longer to recover and possibly could benefit from some re-seeding. Other areas of the field while looking rough, always recovered within the first grazing year. Steve also said this is probably not the way to go on hilly pastures where erosion could get started and form gullies with this type of abuse. It works well on bottoms or level paddocks. So, there it is, one plan for pasture renovation that depends upon winter bale movement management, time and patience.

PLAN 3: "Conventional" renovation. Conventional renovation generally involves either frost seeding or no-till seeding. In Athens County graziers who have been rotationally grazing their pastures for at least several years and building up a thick sod are not having a lot of success with frost seeding, even in pastures that have been grazed down close. I attribute this to the seed being unable to get in good contact with the soil and lack of good freeze/thaw cycles. However, frost seeding or no-till seeding may be the plan to use if the pasture has been tore up and it is a hilly pasture with the real possibility of some significant erosion taking place. If the pasture is tore up to that point, then frost seeding should work because there is enough exposed soil to get seed/soil contact. It is also a less expensive option than no-till seeding. Beyond having some exposed soil, the other key ingredient in frost seeding success is good freeze/thaw cycles. Over the past several years with our mild winters we have not had good freeze/thaw cycles. At this point it looks like this year may provide better freeze/thaw cycles, but this is a factor to consider. Generally frost seeding works best with legumes like red and white clover, as compared to the lighter grass seeds.

No-till seeding provides better assurance that seed is placed in contact with the soil, increasing chances for a successful establishment. Under rough soil conditions where cows have trampled the area, it may also provide some smoothing of the soil. If a perennial grass is the target plant, no-till seeding is probably the best renovation option. The disadvantages of no-till seeding include the added fuel and machinery expense as compared to frost seeding and the need for a favorable seeding window to use the no-till drill. If we get a wet spring and soils don't dry out, there may be no opportunity to seed.

If a hilly pasture paddock has been trampled to the point that erosion is a concern, it requires some intervention by the grazier to reduce or prevent that erosion. Clif Little, Extension Educator in Guernsey County replied to an email I sent him and suggests that annual ryegrass mixed with the perennial forage can be used in small amounts to provide quick green-up to hold the soil. Other suggestions along this same line would be to use a cereal grain such as oats or rye to provide a quicker cover, as well as some better quality forage while the sod base recovers. Winter wheat could also be used, and seeded in the spring would not head out, maintaining forage quality over a longer period.

In summary, the renovation plan the producer chooses will depend upon the severity of the trampling damage and the topography of the pasture. A hilly pasture with severe trampling damage requires some reseeding and use of a quick cover species such as annual ryegrass or a cereal grain in the mix. A pasture paddock severely trampled but with little slope and slight to no erosion concern can either wait for nature to take its course or utilize some reseeding. The let nature take its course option can be effective if the grazier has enough pasture so that this damaged paddock can be given a rest period of 2 to 3 months to recover. The producer will have to deal with (through mowing or quick grazing pass) annual weeds such as pigweed, ragweed and lambsquarter along with summer annual grasses such as barnyard grass and goose grass. If that is not possible, reseeding, especially with the use of a small grain may be preferable. Under either hilly or more level topography, combined with trampling that does not destroy the sod base, giving nature time is an option, or if the pasture is needed back in the production cycle quicker, then using some reseeding may be the better choice. In all cases, producers should make sure that pasture fertility, including a soil pH above 6.0 (preferably 6.5) soil P between 40 and 60 lbs/acre and soil K around 300 lbs/acre is maintained. This will give pastures the best chance for recovery whether naturally or through reseeding, as well as help build a more productive sod base.

DDG's for Ohio Cattlemen?

Ohio State University Extension will host a meeting on acquiring DDG's from the ASA Alliance Bloomingburg ethanol facility on March 5th at 6:00 PM. Tony Eckman and Mark Abraham, from Cargill, will discuss the logistics of getting the DDG's and also the relative quality of the product. Dr. Maurice Eastridge, OSU Department of Animal Sciences, will cover ration ingredient costs and the use of DDG's in Dairy rations. Dave Puthoff, Land O'Lakes, will cover the use of DDG's in beef and sheep rations.

The program will be held at the Fayette County Extension Office in Washington Courthouse, Oh. The cost of the program is $5.00. You are asked to register by calling the OSU Extension office in Fayette County at (740)335-1150 by March 2nd. For more information, contact John Yost at (740)335-1150 or e-mail him at [email protected]


Boehner Announces 2007 Eighth District Farm Forum - 16th Annual Farm Forum to Host USDA Secretary Mike Johanns as Keynote Speaker

U.S. Department of Agriculture Secretary Mike Johanns will visit Ohio in March to speak with local farmers and agriculture experts, Congressman John Boehner (R, OH-8) announced today. Boehner confirmed Secretary Johanns is slated to be the keynote speaker for the 16th Annual Eighth District Farm Forum.

Boehner will host Farm Forum at Edison State Community College, 1973 Edison Drive in Piqua, on Saturday, March 10, 2007. Registration opens at 9:30 a.m. and the program will begin promptly at 10:00 a.m.

Farm Forum is a free event for anyone with an interest in agriculture. To RSVP for this March 10th event, contact Boehner's district office toll-free at 1-800-582-1001 or visit Boehner's website here.

Farm Forum is an important opportunity to take a hard look at the issues facing the Ohio agriculture community," noted Boehner, who previously served as Vice-Chairman of the House Agriculture Committee. "I urge anyone with an interest in agriculture to join us and participate in our discussions again this year."

Mike Johanns was sworn in as the 28th Secretary of the U.S. Department of Agriculture (USDA) on January 21, 2005. Secretary Johanns' grew up on a dairy farm in Iowa and describes himself as "a farmer's son with an intense passion for agriculture."

A distinguished panel of experts will join Secretary Johanns in Piqua, including Ohio farmer and president-elect of the National Pork Producers Council, Bryan Black, OSU Professor Carl Zulauf, Jim Wiesemeyer from Informa Economics, and Dave Juday, adjunct fellow with the Hudson Institute's Center for Global Food Issues and senior analyst with World Perspectives, Inc. The panel will discuss a wide range of issues at Farm Forum, including the 2007 Farm Bill.

Boehner's congressional district ranks among the largest agricultural districts in the State of Ohio. The Eighth Congressional District includes all of Darke, Miami, and Preble counties, most of Butler and Mercer counties, and the northeastern corner of Montgomery County. Boehner was first elected to Congress in 1990.


The Matter Is Margins - Not The Market - Nevil C. Speer, PhD, MBA, Western Kentucky University (reprinted with permission from 2/12/07 CattleNetwork.com)

The market has persistently defied underlying expectations in recent years. 2007 commenced as no exception: continual bouts of winter weather would ordinarily lead to likelihood of an incremental weather premium; rather, the turn of events has turned both sides to indecision. As such, traders have been reticent about getting too far out in terms of weekly commitments.

The net result: negotiations have been consistently slow to develop during the past four weeks with uncertainty surrounding the market leaving spot prices stagnant. The cash market was bound to an $86-8 trading range during much of January. Delay is not denial: February's open finally saw some action; cattle feeders in the southern tier managed to bargain some extra money and agreed to weigh cattle at $88-9. And February's first full week of business facilitated some follow-through for northern trade which established itself on Thursday at $90-1 (as of Friday the southern market hadn't been established as packers and feeders remained $4-5 apart).

Meanwhile, front-end contracts at the CME have been active. February live cattle encroached $94 last month at this time, receded back to $90 in late-January and have since reversed to retest earlier highs. April live cattle have also benefited from upside sentiment - the contract tested $96. The culmination of a flat cash market and a weather-fueled futures rally has made the aspect of risk management somewhat challenging in early February: basis has swung from an excess of negative-$10 to zero and now back to negative-$4-5. Those circumstances leave the market in a quandary: cash trade needs to surge higher or February's contract must surrender some recent gains to achieve convergence later in the month.

USDA's cattle-on-feed report largely reflected pre-report expectations. Some important trends were portrayed, though, relative to spring. Most significant: December marketings (1.63 million head) represent the lowest monthly total on record and were 8% behind the 5-year average. Simultaneously, January's beginning inventory of 120+ day cattle is record large within the data series (partially an artifact of large calf placements earlier in the year). In combination, it reveals work to do in terms of throughput. However, closeouts are ugly and that makes for reluctant sellers. Feedyards, though, find themselves between a rock and a hard place. Reluctance to market is facilitated by cheap corn - the strategy being to hang on and hope for some upside to the market. But…corn is expensive and that can prove to be a costly strategy.

The other side of the equation: packers must be willing to purchase large volumes. Packer margins will need to remain solid to keep cattle moving. That being said, those defensive about prospects for spring are cautious about the level to which wholesale prices will move seasonally higher. Cutout values experienced a favorable boost in mid-January as Choice wholesale prices surpassed $155. However, they have since plummeted to the low-$140's. Perhaps more importantly, the Choice/Select spread has fallen below $7 (see graph below). None of which bodes well for beef demand going forward. Drs. Grimes and Plain (Cattle Outlook) also report that beef demand declined 4.4% during 2006 versus 2005.

Out in the country the primary item of concern has been upon the direction of the feeder market following Christmas / New Year's break. The 4-week moving average fell below $95, basis yearling steer, for the first time since April '04. Simultaneously, calves are trading at levels not seen since 2003. The feeder market is amidst a four-sided squeeze. First, and most obvious, the overarching causal factor is derived from escalating corn prices. Second, winter weather has diminished demand for feeder cattle over the short-run; feedyard resources and logistics are increasingly dedicated to simply maintaining daily operations, let along receiving large numbers of replacements. Moreover, weather has slowed down marketings and aggregate feedyard throughput. Third, feeder prices are being pressured by uncertainty relative to performance expectations: it's extremely difficult to estimate cost-of-gain given continued bad weather and tough pen conditions. Fourth, closeouts are extremely challenging of late. However, spring demand for grass cattle is around the corner and should be extremely favorable per high grain prices.

It's easy to become distracted by the absolute value of the market. However alluring that focus is, it's proves detrimental especially during periods of turbulence. The beef complex remains largely a margin business. That being said, as referenced above, feedyard margins are currently very difficult: regardless of where a feeding company is with respect to cost management over the past several months, current closeouts are comprised of replacements purchased against cheap feed and represent equity drain in the sector.

The illustration below (Feedyard Gross Margin) places the current situation with the broader perspective. During the course of the past several years feeding costs have been relatively consistent. For the most part general assumptions regarding aggregate cost-of-gain have been fairly accurate and provided some indication of industry-wide profitability trends. The graph represents gain cost at $52/cwt or $260/head for the feeding period. Clearly, there's variation within the industry (as indicated by the shaded area). Gross margin above $260 (or whatever value you want to utilize) represents profitability; conversely, gross margin less than that value represents losing closeouts.

Those assumptions shifted dramatically in 2006 as corn began it's ascent to new levels. That transition provided new dynamics to feedyard profitability (and many of our assumptions) in several important ways:

1) Some feeding companies are more proficient and aggressive about managing risk relative to price variance within the corn market.

2) The feeding sector is experiencing significant basis shift in terms of feed costs.

The sum total of those variables initiates divergence in terms of feed costs across the feeding sector.

2007 will prove to be one of the more challenging weather years on record creating difficult pen conditions for several months. That consideration becomes important because it compounds the discussion above relative to corn prices. On one end of the spectrum the sector possesses some feedyards adept managing feed costs and also proficient at maintaining excellent pen conditions. But on the other end are those who find themselves behind the curve in terms of inputs and also confronting extended ice or mud. Those caricatures represent divergent competitive positions within the sector. More importantly, they represent the rapidly declining ability to make sector-wide assumptions with regards to performance and profitability.

The Monthly Market Profile has previously referenced the term "edge of chaos": it's a metaphor utilized by business analysts to explain operating environments which compel industries and/or organizations to undergo transformation. The term invites the need for improved knowledge, the ability to adapt to non-routine challenges and invokes enhanced decision-making tools. Seemingly, the feeding sector has entered such a period.

What's the take-home message? Within that environment it's critical for individual businesses to possess an accurate assessment of competitiveness. Knowledge is power and the ability to benchmark is vital to improving economic efficiency - perhaps making the difference in the struggle of survival during periods of significant equity drain. That's not exclusive, though, to feedyards.

Cow/calf producers who are looking ahead and assessing retained ownership alternatives will also want to familiarize themselves with differences among feedyards in 2007: as a customer, it's vital to accurately compare your options. This is an important time in the feeding industry and may contribute to some long-term transition and/or consolidation.







 

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